VICTORIA — Allowing people to sue for pain and suffering in car accidents has been viewed as a fundamental principle in British Columbia, but that changed Tuesday when the government joined Canada's other provinces in limiting payouts to some crash victims because of a financial crisis at the public insurance corporation.

Attorney General David Eby said a payment cap of $5,500 for pain and suffering on minor injury claims is a necessary component of the NDP government's plan to bring back financial stability to the Insurance Corporation of British Columbia, which faces a projected net loss of $1.3 billion this year.

The changes will save up to $1 billion annually, Eby estimated.

Eby would not comment directly on the possibility of further premium hikes this year after an increase of 6.5 per cent last year.

"It's going to take some time to turn around the problems with ICBC," Eby said at a news conference. "I acknowledge there is no silver bullet that will solve things immediately in terms of a problem that's been building for years, unaddressed."

Eby said the limit on minor injury claims would not take effect until April 2019 as part of legislation to be introduced by the government.

Without the NDP's plan, Eby said drivers could face average increases in their premiums of $400 or more a year.

The cost of minor injury claims is placing the largest strain on insurance rates, Eby said, with payouts hitting a record $2.7 billion in 2016, an increase of 80 per cent since 2009. Eby said payouts for minor injury claims have increased by 265 per cent since 2000.

"B.C. is the last province in Canada to take this kind of action," said Eby.

He said the legislation will propose a definition for minor injury that would include sprains, strains, mild whiplash, cuts, bruises and anxiety and stress after a crash. It will not include broken bones and brain injuries, including concussions, or other more serious impairments.

Eby said the average claim for minor injuries is just over $30,000, with pain and suffering payouts averaging $16,500.

A new tribunal will be introduced by April 1, 2019, to resolve injury claim disputes within 60 and 90 days, he said. The current time for an average legal claim handled through the corporation is 30 months.

He said the government will double the medical care and recovery cost allowance available to accident victims to $300,000, regardless of fault. Eby said the change, which is the first increase in 25 years, is retroactive to Jan. 1, 2018.

Liberal Leader Andrew Wilkinson said Eby's proposals do not lower premiums for drivers or improve compensation for accident victims.

"The option is, of course, to have a wholesale re-examination of ICBC," he said. "It's time to re-examine the whole thing."

The corporation is a state-run model created 44 years ago by the NDP, Wilkinson said.

Eby said he will announce a program to review insurance rates based on driver records within weeks. He did not say when motorists can expect changes.

"The system is disconnected from driver behaviour," he said. "We want to fix that. We want to reconnect driver behaviour with the rates they pay."